feb 2014 brief 3 stripped of exhibits
TRANSCRIPT
IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DIVISION
Wells Fargo Bank NA. as Trustee for Securitized C.A. Case No. 023136Asset Backed Receivables LLC 2006-OP1 Mortgage Pass-Through Certificates, Series 2006 OP1
Plaintiff,
v. John A. Reed, et al.
Defendant
DEFENDANTS MOTION TO VACATE
Now comes Defendant John A. Reed (Defendant), for this motion to vacate this Court’s November 13th 2008 judgment entry granting Plaintiff Wells Fargo Bank NA. as Trustee for Securitized Asset Backed Receivables LLC 2006-OP1 Mortgage Pass-Through Certificates, Series 2006 OP1 (“Plaintiff”) motion of judgment on the basis of the State of Ohio’s Supreme Court’s October 31, 2012 holding in Federal Home Loan Mortgage Corporation v. Schwartzwald, 2012-Ohio-5017.
Respectfully submitted, ________________________
John A. Reed40 Maple Ave..Centerville, Ohio 45459937-890-2576
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SERVICE
A true and exact copy of the foregoing has been served this 16th day of August, 2010 via email as follows:
Atty’s for Plaintiff
Amelia A. Bower (0013474)
and
David Van Slyke (0077721)300 East Broad St., Suite 590Columbus, Ohio 43235Via email @ [email protected] [email protected]
and
Sara M. Petersmann 0055402Lerner, Sampson & RothfussP.O. Box 5480Cincinnati, Ohio 45201-5480Via email @ [email protected]
Atty for Defendant John L. ReedThomas W. Kendo7925 Paragon Rd.Dayton, Ohio 45459Via email @ [email protected]
CERTIFICATE OF SERVICE THE UNDERSIGNED HEREBY CERTIFIES that a true and correct copy of the foregoing has been forwarded, via U,
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Introductory Statement
As an initial matter, Defendant freely acknowledges that Plaintiff filed this lawsuit in 2008, and much litigation has since ensued, including an appeal and motion for relief from judgment pursuant to Civ. R. 60(B).
Plaintiff debt collector Wells Fargo Bank as Trustee for “Trust” claims to be the real party in interest to foreclose on an alleged Note and Mortgage created between H&R Block and Defendant Reed. Defendant Reed has repeatedly disavowed any knowledge of same.
This does not, however, change the fact that the Court never had jurisdiction to hear this matter, nor was Plaintiff Wells Fargo Bank N.A. as Trustee, the real party in interest entitled to enforce the alleged note and mortgage on February 27th, 2008, the date Plaintiff filed the foreclosure complaint, nor can it be at any point thereafter, without Plaintiff having first been assigned or otherwise been legally vested as the true Holder in Due Course of the note & mortgage in question. Defendant submits that Plaintiff is not, was not, and by the Trust’s own controlling document’s terms, could never have been.
Defendant also states that by the terms found upon the alleged Mortgage itself, as is shown on page one, under the heading BORROWER COVENANTS:
“Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.”
Within this action, Defendant is merely exercising his legal requirement and duty of warranting and defending generally the contractual terms of the alleged mortgage contract.
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Debt collector Plaintiff Wells Fargo Bank N.A. as Trustee (WFB) lacked standing to bring, initiate or invoke this action because it was not, nor was it allowed to be, the holder of the note or the assignee of the mortgage at the time it filed suit (explained infra). If a party does not have standing at the time the complaint is filed, it is a jurisdictional problem that cannot later be cured.
The question of standing is a threshold question of whether the party has a personal stake in the outcome—and if that personal stake does not exist when the lawsuit is filed, the suit must be dismissed. Plaintiff Wells Fargo Bank N.A. as Trustee had no legal interest at the time it filed the complaint, and standing cannot exist without a legal right or claim.
Since the foreclosing bank relied on an alleged after foreclosure initiation acquired interest in the alleged note and mortgage to establish its right to enforce the agreements, then I Move the Court to vacate the judgment in its entirety or to remand back to the civil court with instruction for same.
I need not proceed under Civ.R. 60(B) because the judgment is void. The on point decision of the Ohio Supreme Court’s Schwartzwald decision1 states that standing has to exist at the time the case is filed, and if it does not exist, the jurisdiction of the common pleas court was not, it could not have been invoked. A court without jurisdiction cannot enter any judgment (except one dismissing the case for lack of jurisdiction). A motion to vacate a void (as opposed to a voidable) judgment is not based on Civ. R. 60(B), it invokes the court’s inherent power. Patton v. Diemer, 35 Ohio St. 3d 68 (1988).
1 Fed. Home Loan Mtge. Corp. v. Schwartzwald, 2012-Ohio-5017. (Standing is required to invoke the jurisdiction of the common pleas court, and it is determined as of the filing of the complaint.)
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WFB, according to the binding case law in the State of Ohio and Montgomery County, was not entitled to judgment as a matter of law because they were not and could not ever have been the real party in interest. The judgment is void ab initio. Res judicata cannot be a bar to judgment that is void ab initio.
I. Relevant Factual Background
1. On February 27th, 2008 (Ex. “A”) , Plaintiff filed the foreclosure complaint in this action.
2. As of March 6th, 2008 the note & mortgage at issue had not been assigned from whoever the previous holder/owner was, to Plaintiff herein.
3. On August 26th, 2008 Plaintiff filed a Notice of Assignment of Mortgage (which contains therein also an Assignment of Note) (Exh “C”), which contained a copy of a recorded assignment of Defendant’s note & mortgage to Plaintiff. (“The Assignment,” attached hereto as Exh. “B”).
4. Plaintiff recorded the Assignment on March 27th, 2008 or 29 days after the foreclosure lawsuit filing.
5. On November 13th, 2008 the Court granted Plaintiff’s judgment and entered a decree of foreclosure against Defendant.
Defendant has repeatedly and continuously held that Plaintiff in the case at Bar lacked the capacity to evoke the jurisdiction of the
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court in this action;2 hence Plaintiff lacked standing to initiate this suit.3
II. Law and ArgumentThere are more issues with this post dated assignment “Exh. “B”
than just those addressed in the Schwartzwald Decision. But that’s where we start.
The POST DATED ASSIGNMENT issue # 1.As is evidenced in Plaintiff’s alleged “Assignment” from Option
One Mortgage Corp. to “The Trust” the date of the transference or “Assignment” of both the Note & Mortgage did not occur until after the suit to foreclose had already been filed.
In Federal Home Loan Mortgage Corporation v. Schwarzwald, et al., a case recently decided by the Ohio Supreme Court, plaintiff bank brought a foreclosure lawsuit before it obtained an assignment of mortgage securing defendant homeowner’s loan. Defendants maintained that plaintiff lacked standing to sue (much as Defendant previously contended in this case) because the assignment of mortgage had not been recorded
2 August 15, 2008, Memorandum in Opposition to Plaintiffs Motion for Summary Judgment • October 15, 2008, Reply to Complaint • November 21,2008, Motion to Vacate a Void Judgment December 1, 2008, Memorandum in Opposition to Plaintiffs Memorandum in Opposition to Defendant John A.
Reed's Motion to Vacate • January 16, 2009, Motion for Reconsideration • April 1,2010, Amended Motion to Appeal Ruling of the Lower COURT • April 30, 2010, Application for Emergency Reconsideration • February 14,2011, Motion to Vacate Judgment Entry
3 Civ.R. 10(D) requires attachment to the pleading of a copy of the written account or any other written instrument when a claim or defense is founded on those documents.Fed. Home Loan Mtge. Corp. v. Schwartzwald, 2012-Ohio-5017. (Standing is required to invoke the jurisdiction of the common pleas court, and it is determined as of the filing of the complaint.)Wells Fargo v. Burrows, 2012-Ohio-5995 (9th Dist.)(A plaintiff must attach documents evidencing the right to enforce both the note and the mortgage to the complaint to show standing, or be subject to dismissal.)HSBC Bank USA, N.A. v. Sherman, 2013-Ohio-4220 (1st Dist.)(Determination of standing should be made based on attachments to a complaint, but standing in a foreclosure action can be established by showing the right to enforce either the note or mortgage. Also adopted in the Second, Fifth, Eleventh, and Twelfth Districts.)Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (To survive a motion for summary judgment for lack of standing, a party must set forth by affidavit or other evidence specific facts to support its claim.)
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prior to the filing of the lawsuit. Plaintiff was assigned the mortgage via formal assignment, as here, only after the filing of the lawsuit. The trial court entered a judgment in favor of plaintiff, and the Second District Court of Appeals affirmed.
The Supreme Court reversed, holding that standing is a jurisdictional requirement that must be satisfied to even initiate a foreclosure lawsuit:
“We recognized that standing is a ‘jurisdictional requirement’ in State ex rel. Dallman v. Franklin Cty. Court of Common Pleas (1973), 35 Ohio St. 2d 176, and we stated: “It is an elementary concept of law that a party lacks standing to invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the subject matter of the action.” (Emphasis added by the Court).
(Schwarzwald, attached hereto as Exh. “D” at para. 22).
Further, the Court stated,
“Because standing to sue is required to invoke the jurisdiction of the common pleas court, ‘standing is to be determined as of the commencement of suit.”’ Id. At para. 24 Invoking jurisdiction of the court, thus, depends on the state of things at the time the action is brought, and not after. Id. At para. 25.
In reversing the Second District, the Supreme Court included:
The lack of standing at the commencement of a foreclosure action requires dismissal of the complaint[.]Id. At para. 40 (Emphasis added).
Hence, in accordance with the ruling of the Supreme Court of the State of Ohio, when Plaintiff filed this lawsuit on February 27th 2008, Plaintiff lacked the capacity to invoke the jurisdiction of the court or in other words, Plaintiff did not have “standing to invoke the jurisdiction of the court” because Plaintiff debt collector had not yet
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been assigned the mortgage and note, and for reasons stated in specificity below it could not then nor can it ever cure this lack of standing through a later filing of the mortgage assignment as it attempted to do on March 27th, 2008.
HISTORY as alleged by Plaintiff.
Plaintiff brought this action to foreclose based on an alleged mortgage, dated June 9th, 2005, which secured an alleged loan of $100,000 issued to the Defendant by “H&R Block Mortgage Corporation, a Massachusetts Corporation”, (“H&RB”). On June 9th, 2005, H&RB assigned the alleged note and mortgage to Option One Mortgage Corporation, (“Option One”). Option One then alleges to have assigned the note and mortgage to Plaintiff by assignment executed March 7th, 2008. Plaintiff is the alleged debt collector “Trustee” for a securitized trust titled “Securitized Asset Backed Receivables LLC 2006-OP1 Mortgage Pass-Through Certificates, Series 2006 OP1”, (“the Trust”). On February 27th 2008 Plaintiff Trustee initiated the foreclosure suit at Bar.
HISTORY as alleged by the EVIDENCE
Plaintiff brought this action to foreclose based on an alleged mortgage, dated June 9th, 2005, which secured an alleged loan of $100,000 issued to the Defendant by “H&R Block Mortgage Corporation, a Massachusetts Corporation”, (“H&RB”).
On June 9th, 2005, H&RB (Entity A), with the use of an Allonge (exhibit **) allegedly assigned all of their rights to the note and mortgage to Option One Mortgage Corporation (Entity B), (“Option One”).
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Option One simultaneously (using the same Signatory) creates a secondary allonge (exhibit**) transferring all of their rights to the note and mortgage to _________________. 4
Option One then allegedly (there is no assignment proffered by Plaintiff for this action), through 2 unsigned and unauthenticated, previously created documents (intent5),
1. titled: “Purchase Price and Terms Agreement” (Ex..**) and
2. titled: EXECUTION COPY FLOW AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (Ex**),
with which we are lead to believe (without any proof whatsoever) that Option One does assign/sells/transfers6 all of their rights to the NOTE & Mortgage to Barclays Bank (Entity C)(Sponsor) who then, we are led to believe (intent7), bundles the Note & Mortgage along with approximately 5,000 other like kind investments and uses the entire bundle to create a new financial instrument called a Special Purpose Vehicle (SPV), which is designed to be deposited into a REMIC Trust.
4 I would write “Blank” but according to SEC Law, if I did that then I would be representing that only “Blank” was the authorized holder, those would be the same SEC laws which require the word “Bearer” to be inserted before this Allonge can be treated as a Bearer instrument.
5 Black’s 9th intent. (l3c) 1. The state of mind accompanying an act, esp. a forbidden act. • While motive is the inducement to do some act, intent is the mental resolution or determination to do it. When the intent to do an act that violates the law exists, motive becomes immaterial. Cf. MOTIVE; SCIENTER.6 As with almost all of Plaintiff’s document submissions, the documents Plaintiff submits that are to be representative of the transfer of the Note & Mortgage from Option One to Barclay’s Bank are all unsigned and unauthenticated so no “true” method of transfer is even represented. BUT, the controlling Law (IRS & NY. EPTL) both require full sales and transfer of all rights and ownership before a true securitization of the notes and mortgages into the trust can exist and the Trust’s controlling document, the PSA also mandates a complete evidentiary trail of all transfers and/or assignments of both the note and mortgage before being allowed to be deposited into the trust.7 Black’s 9th intent. (l3c) 1. The state of mind accompanying an act, esp. a forbidden act. • While motive is the inducement to do some act, intent is the mental resolution or determination to do it. When the intent to do an act that violates the law exists, motive becomes immaterial. Cf. MOTIVE; SCIENTER.
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Barclays Bank (Entity C) then, we are lead to believe, allegedly sells8 (without a physical assignment, no proof of transfer, no proof of negotiation, no receipt of delivery, etc.) and transfers all of their rights to the contents of the SPV containing Defendants alleged Note & Mortgage (again without a physical assignment, no proof of transfer, no proof of negotiation, no receipt of delivery, etc.) to the securitized trust’s Depositor9 “Securitized Asset Backed Receivables LLC”(Entity D) (“SABR”), who then allegedly deposits and transfers all of their interests and rights (yet again without a physical assignment, no proof of transfer, no proof of negotiation, no receipt of delivery, etc.) to the notes and mortgages in the SPV10 to the “Trust” (Entity E). 11
Option One (Entity B) then alleges (with intent and scienter12) to have assigned the note and mortgage to Plaintiff (Entity E) by assignment of Mortgage (ex**) executed March 7th, 2008. Plaintiff had previously initiated suit on February 27th, 2008. The important aspect from above is the assignment from Entity B directly to Entity E.
Plaintiff, as represented is the alleged debt collector Trustee for a securitized REMIC trust titled “Securitized Asset Backed Receivables LLC 2006-OP1 Mortgage Pass-Through Certificates, Series 2006 OP1”, (“the Trust”).
ARGUMENT (besides Schwartzwald (post dating))
8 Same as Footnote 5 above… no signed or authenticated contract.9 Same as Footnote 5 above… no signed or authenticated contract.10 Same as Footnote 5 above… no signed or authenticated contract.11 It is important here to note that in each transaction listed above, Plaintiff also produces no receipts, no delivery acceptance, nothing whatsoever to show proof of conveyance or transfer or negotiation or sale of, in the end, an alleged $5 Billion worth of financial instruments from any party to any other party whatsoever.12 Black’s 9th scienter (sI-en-tJr or see-), n. [Latin "knowingly"] (1824)1. A degree of knowledge that makes a person legally responsible for the consequences of his or her act or omission; the fact of an act's having been done knowingly, esp. as a ground for civil damages or criminal punishment. See KNOWLEDGE; MENS REA. [Cases: Criminal Law C=>20; Negligence (::::J212, 302.] 2. A mental state consisting in an intent to deceive, manipulate, or defraud. - In this sense, the term is used most often in the context of securities fraud. The Supreme Court has held that to establish a claim for damages under Rule lOb-5. a plaintiff must prove that the defendant acted with scienter. Ernst & Ernst v. Hochfelder, 425 U.S. 185,96 S.Ct. 1375 (1976). [Cases: Securities Regulation G:::c60,45, 60.51(2).]
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The lack of proper transfers of the note & mortgage (proper would be A – B, B – C, C – D and D – E) and in fact, the improper transfers (as in the case at Bar where Plaintiff’s Assignment alleges transfer from Entity B to E), to others creates a series of document defects and deficiencies that include, but are not limited to the following:
a) Broken endorsement chains (A – B, B – E);b) Original Notes without signatures on endorsements;
c) Notes with skipping endorsements;
d) Notes with endorsements on unattached allonges;
e) Allonges unattached to their original wet-ink notes;f) Allonges copied and taken from other notes and placed onto a
different note ;g) Allonges unattached to original notes with blank
endorsements;
h) Notes never endorsed;
i) Allonges never dated;
j) Allonges in blank and pre-executed and undated for later fill-ins by unknown parties;
k) Double pledges of the same note and/or loan to different parties;
l) Post-dated assignments of mortgages and notes;
m) Robo-signed assignments of mortgages and notes;
n) Post-dated assignments of mortgages and notes;
o) Assignments executed with no lawful authority;
p) Assignors assigning to themselves;
q) Two different parties claiming the ownership of the same note/loan.
Can the Trustee Foreclose?
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Further, Defendant requests Judicial Notice that in the case at Bar, it is the “Trustee for the Trust” that is bringing the foreclosure suit. Plaintiff Trustee offers no proof of any transfer of any ownership, or rights or authority from the Trust to the Trustee13 of/or pertaining to the Note and/or the Mortgage and/or pertaining to the rights or authority granted to the Trustee, in the case at Bar to foreclose.
The above statement is of utmost importance because within the Trust’s controlling document, it’s Indenture, the Pooling and Servicing Agreement (PSA), at section 3.15 we find that by contractual agreement it is not the Trustee’s position to engage in any foreclosing related activities, it is instead the “Servicer’s”14 obligation. Section 3.15 reads:
Section 3.15 Realization upon Defaulted Mortgage Loans. “The Servicer shall use its best efforts, consistent with Accepted Servicing Practices, to foreclose upon or otherwise comparably convert (which may include an acquisition of REO Property) the ownership of properties securing such of the Mortgage Loans as come into and continue in default…” emphasis mine
43. Again, Plaintiff Trustee, an entity separate from yet created
in the entirety from the Trust itself, it’s actions limited by law and by
contract, lacked not only any proper Assignment of the Note and/or
mortgage that is the subject of this action, but also lacked any
authority to initiate the foreclosure action which must be given within
the trust’s governing document, its Indenture, the Pooling and
Servicing Agreement (PSA). Plaintiff Trustee lacked the legal and
mandatory requirement of capacity to invoke the jurisdiction of this
13 Or for that matter any proof of transfer to the trust from the Depositor or proof of transfer from the Sponsor (Barclay’s Bank) to the Depositor or proof of transfer from the Lender Option One to the Sponsor! One can only transfer what one has to transfer.14 Servicer, another separate legal entity hired by the trust to service the document requirements of the trust. It’s duties are outlined with specificity within the trust’s Pooling and Servicing Agreement.
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court and therefore, Plaintiff had no standing to initiate this suit which
means this suit was VOID ab initio.
44. Further, Plaintiff can never suffer a loss or injury as is
required by the Real Party in Interest Rule. As Plaintiff Trustee is only
an incident of the Trust and as the Trust Indenture gives no rights to
Plaintiff Trustee to otherwise obtain, purchase, or hold legal
ownership of any item other than trust’s possessions, Plaintiff Trustee
fails to satisfy the U.S. Constitution Article III’s standing requirements
that a plaintiff must show which require:
(a) it has suffered an injury in fact that is concrete and
particularized and actual or imminent, not conjectural or
hypothetical;
(b) the injury is fairly traceable to the challenged action of the
defendant; and (c) it is likely, as opposed to merely speculative,
that the injury will be redressed by a favorable decision.
Standing is a threshold issue. Without standing to invoke the jurisdiction of the court at the initiation of suit, no further mutterings or protestations of the Plaintiff can be heard for they are moot.
THE TRUST
The Trust was formed as a vehicle for purchasing mortgage backed securities and then selling certificates based solely on the income generated by those monthly principal and interest payments generated by those notes and mortgages held within the Trust. The Trust is subject to the terms of the trust indenture (controlling
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document) memorialized in a document titled the “Pooling and Servicing Agreement”, (“the PSA”). The PSA was signed by the Depositor, Securitized Asset Backed Receivables LLC (“SABR”), by the Servicer, Option One, and by the Trustee, WELLS FARGO BANK, NA, and is dated January 1, 2006.
The PSA contractually sets forth the governing law of the trust and the manner in which mortgages would be purchased by the trust, as well as the duties of the trustee and the servicer. It is the trust’s own contractual controlling document.
Section 2.01, subsection 1 of the PSA requires that transfer and assignment of mortgages must be effected by hand delivery, for deposit with the Trustee with the original note endorsed in blank.
Section 2.05 of the PSA requires that the Depositor transfer all right, title, interest in the mortgages to the Trustee, on behalf of the trust, as of the Closing Date. The Closing Date as provided in the PSA is January 26th, 2006.
The Date of the Assignment of Mortgage (and Note) referenced infra, is over 2 years past the date allowed for deposits into the trust. If the trust does not perfect legal title by taking physical possession of the notes and mortgages, the Internal Revenue Code, specifically 26 U.S.C. § 860G(d)(1), provides for a 100 percent tax penalty on those non-complying cash flows severely affecting the Trust’s Investors Return On Investment (ROI).
As listed in the PSA, the Depositor in the case at Bar was “Securitized Asset Backed Receivables LLC” ("SABR"). Within the schema of a securitized MBS (Mortgage Backed Security) REMIC (Real Estate Mortgage Investment Conduit) trust, the Depositor is the mandated entity in the title chain that provides the Bankruptcy
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remoteness necessary to the Notes and the Mortgages deposited into the trust, for compliance to obtain the AAA rating with the securities ratings agencies required by the Trust, and also mandated for compliance with IRS rule 86015 . The Depositor is also the authorized and designated sole depositor to the trust.
In the case at Bar, Plaintiff show’s not 1 iota of proof that said Sponsor, Barclays Bank (Entity C), ever received Defendant’s Note and/or Mortgage.
In the case at Bar, Plaintiff show’s not 1 iota of proof that said Depositor (Entity D) ever received Defendant’s Note and/or Mortgage OR the alleged and previously allegedly created SPV (from Sponsor Barclays Bank) containing Defendant’s alleged Note and/or Mortgage.
In the case at Bar, Plaintiff show’s not 1 iota of proof that said Depositor (SABR) ever received or deposited the alleged Mortgage and Note (or SPV) into the Plaintiff Trust.
In the case at Bar, Plaintiff show’s not 1 iota of proof that said Plaintiff Trust ever transferred the alleged Mortgage and Note to the Plaintiff Trust’s Trustee, Wells Fargo Bank N.A. who is the Plaintiff in this case.
It is essential for the courts to understand that before the alleged note & mortgage could be placed within any REMIC trust, each of these steps was mandated by N.Y. E.P.T.L, I.R.C. requirements AND by the contractual terms found within the PSA which was signed and
15 IRC 860 requires that, among other things, the REMIC trust be a “closed entity” and “bankruptcy remote.” New York’s Estate Powers & Trust laws were chosen by RMBS sponsors (in the PSAs) as the “controlling” statutes to govern REMIC trusts, as the EPTL’s rules and concomitant common law establish “common law trusts” that conform the REMIC tax free pass-through requirements. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 7
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agreed upon by the participants of the securitization. The rules for the deposit of all of the Notes & Mortgages allegedly held within the pool of assets owned by the trust are strict and are mandated to be adhered to punctiliously.
As stated in the NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 pg. 77;
“The Mortgage Securitization Transaction In 1986, Congress changed the tax code. One of these changes was the creation of the Real Estate Mortgage Investment Conduit (REMIC). A REMIC or special purpose vehicle (SPV) is an entity that is created for the specific purpose of being a tax-free pass-through for interest income generated by pooled mortgages. This allowed investors to purchase shares or certificates in a mortgage pool that was only taxed once at the investor level. The REMIC rules allowed the mortgage pools to collect interest income from the pool and disburse that income to the certificate holders tax-free at the pool level. Prior to the REMIC, interest income from pooled mortgage investments were taxed twice, once at the pool level and again at the investor level.
REMIC rules are very specific,16 and to qualify as a REMIC under federal and state tax codes, the SPV had to meet very stringent requirements. With respect to RMBS the controlling trust document is known as the Pooling and Servicing Agreement (PSA). One function of the PSA is to establish the rules governing the trust such that the trust’s activities and management conform to IRC 860. If the trust did not conform, it could lose its REMIC status and its tax-free pass-through status.”17
NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 pg. 77
The Trust’s agreement (known as the Pooling and Servicing Agreement (PSA)), the trust’s indenture18, sets forth in its entirety how the trust acquires and is allowed to acquire its assets and the Trust agreement sets forth both powers and the limits of the powers of the Trust and the Trust’s participants.
16 IRC 860 requires that, among other things, the REMIC trust be a “closed entity” and “bankruptcy remote.” New York’s Estate Powers & Trust laws were chosen by RMBS sponsors (in the PSAs) as the “controlling” statutes to govern REMIC trusts, as the EPTL’s rules and concomitant common law establish “common law trusts” that conform the REMIC tax free pass-through requirements. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 717
? If a tax-free pass-through trust lost its REMIC status, the tax penalties to an investor that purchased certificates would be devastating. It would also trigger an event called a “put back.” There was considerable argument over whether these trusts were “business” trusts or common law trusts, but the trend appears to be a judicial recognition that they are in fact common law trusts. NYSBA NY Business Law Journal |Summer 2012 |Vol. 16 |No. 1 end note 8
18 Black’s 9th. trust indenture. 1. A document containing the terms and conditions governing a trustee's conduct and the trust beneficiaries' rights. - Also termed indenture of trust. [Cases: Trusts C=> 19-29.] 2. See deed of trust under DEED.
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The PSA19 requires that each party to the sale of the mortgage loans endorse each promissory note to the next party in the chain of title until the promissory note and mortgage is delivered to the Trustee for the benefit of the Trust. This requirement is included in the PSA and is found at Section 2.01 (b) which in part reads;
(b) In connection with the transfer and assignment of each Mortgage Loan, the Depositor has delivered or caused to be delivered to the Trustee for the benefit of the Certificateholders the following documents or instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements showing a complete chain of
endorsement from the originator to the last endorsee...
(ii) the original of any guarantee executed in connection with the Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a certified true copy of such Mortgage submitted for recording.20
(iv) the originals of all assumption, modification, consolidation and extension agreements, if any, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan endorsed in blank;
(vi) the originals of all intervening assignments of Mortgage (if any) evidencing a complete chain of assignment from the applicable originator to the last endorsee with evidence of recording thereon....
(vii) the original mortgagee title insurance policy ...
(viii) the original or, if unavailable, a copy of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage (if provided) ...
Plaintiff proffers no series of endorsements of the alleged promissory note reflective of each party who had an alleged ownership interest in the alleged promissory note.
Further, this chain of endorsements, or rather the lack thereof,
in order to comply with this Trust’s PSA, would have had to be complete on or before the “closing date” of the trust specified within the PSA of this securitization but in no event more than 90 days from 19 The Trust’s Pooling and Servicing Agreement is a Public Document available here… http://www.secinfo.com/dRSm6.v8h.d.htm
20 Note: indeed NY EPTL law requires recordation of the note before its acceptance as a part of the trust is consummated.
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the closing date of the trust pursuant to section 2.02 of the PSA. The absence of these endorsements on this promissory note is not only very compelling proof of lack of note holder status, but also proof of Plaintiff’s fraud in the production to the Court of the Assignment of Mortgage (Exhibit “E”) which by the terms of the trust’s own governing document (PSA) cannot, does not and cannot now (post trust closing date) ever legally exist.
Under the terms of the trust which are contractually, legally governed under NY E.P.T.L., the contracts between the parties (PSA), and/or UCC § 9 in the case at Bar, there are unmet requirements for the chain of title by the foreclosing entity to be qualified as a “PETE” (person entitled to enforce). In other words, single endorsements in blank, claiming that any party in possession of a note can enforce a note, even a thief, skipped assignees, no proof of Holder in Due Course does not work. The trust’s Trustee is specifically NOT allowed to own an asset acquired out of thin air on its own… its sole existence is for service to the Trust. Anything done by any trust participant in contravention to the trust’s indenture is by contractual agreement VOID at its inception.
The evidence in the collateral file shows an utter and complete failure of the parties to this alleged securitization to actually convey this alleged promissory note to this alleged Trust as was articulated by the Defendant in each and every previous pleading. The plaintiff Trustee has offered no proof of ownership and the collateral file proffered by the Plaintiff through Discovery clearly demonstrates that this loan was not securitized into nor was it ever transferred to this Trust.
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Assuming the note and/or mortgage at issue could somehow retroactively be properly and legally deposited into the Trust, the Court should also be made aware that Sections 2.07 d., e., h., 3.01 c., 3.17 (h), 5.02, c, 8.11 of the PSA are all specific to the case at bar which set forth further explicit restrictions on the powers of the Trustee, Depositor and the Servicer of the “trust” and which prohibits the Trustee, Depositor and the Servicer from taking any action which would jeopardize the REMIC status of the Trust. The production of the post dated, forged and fabricated Assignment of Mortgage is itself a prohibited action. These types of limitations are common and are present in this or a similar form in every pooling and servicing agreement which seeks to create a securitized trust that can claim the tax benefits of REMIC status under the US Tax Code.
Any attempt to accept a transfer of this alleged Promissory note after the January 26, 2006, plus 90 day closing date of the trust would have violated both SEC code 424 & 1122 and the REMIC provisions of the IRS tax code 26 USC § 860 A thru F -for a number of reasons.
a. First, the alleged loan is in default at this time. Therefore the alleged loan cannot be a “qualified mortgage loan” under the IRS tax code because a qualified mortgage loan is a performing mortgage loan.
b. Second, an attempted transfer to the trust is now at a point in time after the closing day of the Trust and after the certificates were issued, in effect, the Plaintiff would be claiming to have transferred an asset to a trust that had by its own terms been closed for more than 2 years at the time the alleged transfer took place.
c. Third, the alleged promissory note was never endorsed to the Trust by the Depositor and as such is devoid of the
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required chain of endorsements required within the PSA and which any reasonable market participant would expect to be present for the purposes’ of establishing the series of true sales set forth in the PSA to establish a whole and complete chain of title of the promissory note for the purposes of bankruptcy remoteness.
d. Fourth, The claim that the alleged note has been transferred to the Trust only because it is endorsed in blank simply flies in the face of the mandatory terms of the PSA and N.Y. E.P.T.L. and is an extreme deviation from the industry standards, customs and practices which prevailed at all times material to this transaction and which prevail today.
e. Fifth, any transfer allowed to be accepted into the trust past the trust’s own cut-off date of deposits invokes the rather draconian IRS mandate of taxing the REMIC trust’s assets not at the favorable rate of 0% that they now enjoy, but at the rate of 100% of the value of their assets… causing, massive financial losses to the Certificate Holder Investors.
Equally, by allowing a Deposit into the trust after the trusts “closing date” as Plaintiff’s “Assignment of Mortgage” alleges, Plaintiff Wells Fargo Bank as Trustee again violates the plain language found within the PSA at section 8.11 titled “Tax Matters’ section (j) para. 6 which reads in part;
Neither the Servicer nor Trustee shall (i) permit the creation of any interests in any Trust REMIC other than the regular and residual interests set forth in the Preliminary Statement,……… or (iii) otherwise knowingly or intentionally take any action, cause the Trust Fund to take any action or fail to take (or fail to cause to be taken)any action reasonably within its control and the scope of duties more specifically set forth herein, that, under the REMIC Provisions, if taken or not taken, as the case may be, could (A) endanger the status of any Trust REMIC as a REMIC or (B) result in the imposition of a tax upon any Trust REMIC or the Trust Fund (including but not limited to the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the Code and the tax on
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contributions to a Trust REMIC set forth in Section 860G(d) of the Code, or the tax on "net income from foreclosure property") unless the Trustee receives an Opinion of Counsel (at the expense of the party seeking to take such action or, if such party fails to pay such expense, and the Trustee determines that taking such action is in the best interest of the Trust Fund and the Certificateholders, at the expense of the Trust Fund, but in no event at the expense of the Trustee) to the effect that the contemplated action will not, with respect to the Trust Fund or any Trust REMIC created hereunder, endanger such status or, unless the Trustee determines in its sole discretion to indemnify the Trust Fund against such tax, result in the imposition of such a tax).
To Summarize, (The closing date of this trust was January 26, 2006. The creation date of Plaintiff’s Assignment of Mortgage is March 7, 2008 or 25+ Months past the trust’s closing date) as such it is in violation of the trust’s own controlling document, the Pooling and Servicing Agreement (PSA), I.R.C. regulations and the trust’s controlling law, N.Y. E.P.T.L. and is VOID. Plaintiff’s and Plaintiff’s counsel clearly show scienter by having acted in contravention to the trust by;
1. creating or manufacturing, (forgery with intent to defraud (intent & scienter))
2. attempting the use of (distribution) and (intent to fraud)3. actually submitting (selling) false, forged and fraudulent
documents within this very Court of Law and Equity, evidenced not only by their late creation date as it concerns legal standing to invoke the jurisdiction of the Court, but also in contravention of IRS REMIC Law as explained above and again within the PSA at Section 8.11 Tax Matters (g) which reads;
(g) not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status of any Trust REMIC created hereunder;
4. Making false statements to the Court
21
Nemo dat quod non habet
One can only give/assign and/or transfer that which one has to give/assign and/or transfer. Only the legitimate rights of the transferor can be transferred to the transferee.
There is no trust if the trust fails to acquire the property. Kermani v. Liberty Mut. Ins. Co., 4 A.D. 2d 603 (N.Y. App. Div. sa Depart. 1957).
In so doing the above, in violation of the law, codes, rules & regulations articulated above, Plaintiff also acted in violation of the Fair Debt Collection Practices Act. The allegations above are re-alleged and incorporated herein by reference.
Defendant John A. Reed incorporates by reference all of the proceeding and foregoing allegations in the entirety of Defendant’s answers & pleadings as in regard to the Complaint in its entirety and from its inception.
The POST DATED ASSIGNMENT 2
As is referred to above, Plaintiff’s “Assignment of Mortgage” (and Note) was created on March 7th, 2008. The Plaintiff Trust, by virtue of it’s REMIC status has what is called a “Cut-Off date”. The Trust’s “cut-Off date” is the date in which the Trust is mandated by law to stop accepting deposits into it. Aside from the creation post foreclosure issue related above, by the terms of the Trust’s own PSA,
22
N.Y. E.P.T.L. & I.R.C. regulations all mandate that this Assignment was void at its inception.
The Trust is also a “Real Estate Mortgage Investment Conduit (REMIC) trust and as such is held in strict regulations with both I.R.S. REMIC trust rules of Law and the Laws and Rules created specifically in accordance with the Trust laws of either the State of the Trust’s creation or by the contractual choice of the participants of the Trust, as is the case at bar. The agreed contractual choice of Law to be adhered to by the Trust’s participants in the case at Bar is New York Trust Law E.P.T.L..
Plaintiff’s production of the “Assignment” is contrary to New York Law and IRS 860. In short, the Plaintiff Trust exercised a prohibited act on March 7th, 2008.
The aforementioned “Assignment” is contrary to the Trust’s Instruments and therefore Void pursuant to IRS 860A-G and New York Estates, Powers & Trusts (E.P.T.L) - Part 2 - § 7 2.4 and the Trust’s Indenture requirements.
"Any action which deviates from the Trust documents is void. § 7-2.4 Act of trustee in contravention of trust If the trust is expressed in the instrument creating the estate of the trustee, every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void".
No possession of the Asset exists until there has been a delivery and an acceptance of the Asset and the giver of the Asset has relinquished all dominion and control over the Asset signifying a true sale of the Asset to the Plaintiff Trust thereby making the Asset, inter alia, bankruptcy remote and securely within the Trust Vault.
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Plaintiff’s proffered “Assignment” in the case at Bar prove’s only that it was a forged and fabricated document created solely for the purpose of facilitating the easy theft of Defendant’s home within a Court of Law and the use of the Court in the laundering of the illegal paperwork used to create the alleged Note & Mortgage and subsequent alleged MBS Investment Trust.
The Trust is a REMIC Trust
The Trust was formed as a REMIC trust.21 Under the REMIC provisions of the Internal Revenue Code (“IRC”) the closing date of the Trust is also the startup day for the Trust. The closing date/startup day is significant because all assets of the Trust are mandated to be transferred to the Trust on or before the closing date to ensure that the Trust received its REMIC status. The IRC provides in pertinent part that:
“Except as provided in section 860G(d)(2), ‘if any amount is contributed to a REMIC after the startup day, there is hereby imposed a tax for the taxable year of the REMIC in which the contribution is received equal to 100 percent of the amount of such contribution.” 26 U.S.C. § 860G(d)(1).
The assignment of the note and the mortgage which alleges the transfer of the Note & Mortgage in this case was dated March 7th, 2008, however, pursuant to the terms of the PSA the trust closed on January 1st, 2006. Acceptance of the alleged Note & Mortgage into Plaintiff Trust at the date shown on Plaintiff’s Assignment is in violation of IRC 860G(d)(2) and as such is mandated to be declared
21 The Internal Revenue Code provides that the terms ‘real estate mortgage investment conduit’ and ‘REMIC’ mean any entity—(1) to which an election to be treated as a REMIC applies for the taxable year and all prior taxable years, (2) all of the interests in which are regular interests or residual interests, (3) which has 1 (and only 1) class of residual interests (and all distributions, if any, with respect to such interests are pro rata), (4) as of the close of the 3rd month beginning after the startup day and at all times thereafter, substantially all of the assets of which consist of qualified mortgages and permitted investments.
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VOID by the terms found within the PSA and by N.Y. E.P.T.L. & I.R.C. regulations.22
THE POST DATED ASIGNMENT 2
In the case at bar, Wells Fargo Bank, N.A, as Trustee of the “Trust”, claims to be the sole and exclusive owner of the securitized note & mortgage. If Wells, as Trustee for the “Trust” is in fact the true and legal owner, it must have acquired legal title to the loan within 90 days of January 1, 2006 (the trust’s “closing date”).
For clarification of the above; New York law states that transfers to a REMIC trust after the closing date of the trust are void. N.Y. Estates, Powers and Trusts Law §§ 7-1.18, 7-2.4. Glaski v. Bank of America, N.A., 218 Cal.Rptr.4th 1079 (2013). See also, Saldivar v. JPMorgan Chase, 2013 WL 2452699 (Bky. SD Tex. 6/5/13) (holding that trustee mortgagee’s position is void if notes and assignments of mortgage not delivered within 90 day of closing of trust); Wells Fargo v. Erobobo, 2013 WL 1831799 (NY Slip Op. 4/29/13) (holding that NY trust law governs securitization (not Ohio law) and that notes and assignments of mortgage must be physically delivered to trustee within 90 days of closing for trustee to have claim of ownership). The Internal Revenue Code provides for 100 percent tax penalties for asset transfers to the trust after the closing date of the trust and the Trust’s controlling document, the PSA, specifically Section 9.02, forbids all participants in the securitization of the assets of the trust to perform any action in contravention to the IRS code.
Further, Section 9.02 of the PSA specifically prohibits the acquisition of any asset for a REMIC fund after the closing date unless
22 There is no trust if the trust fails to acquire the property. Kermani v. Liberty Mut. Ins. Co., 4 A.D. 2d 603 (N.Y. App. Div. sa Depart. 1957).
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the party permitting the acquisition and the NIMS (net interest margin securities) Insurer have received an Opinion letter from counsel, at the party's expense, that the acceptance of the asset will not affect the REMIC's status.
Plaintiff offers no such evidence or proof that a letter has been provided to show compliance with these requirements of the PSA. Plaintiff has proffered23 no evidence of Depositor’s depositing of the note and mortgage into the Trust and has proffered no evidence that the trustee had authority to acquire the note and mortgage herein after the trust had closed or for the purpose of foreclosure.
Defendant asserts that the alleged transfer of the note & mortgage to Plaintiff Trust herein was VOID ab initio because the note is represented to have been acquired after the trust’s closing date and as such is a violation of the contractual terms established and memorialized within the Trust’s controlling document, the PSA.
Whereas in Ohio Law it may be permissible for a “Holder” to execute suit on a note and/or mortgage, in the case at Bar the alleged contraction between parties is not being done by an Ohioan against an Ohioan. Instead it is being committed by a debt collector who is an alleged representative of a NY Trust, a trust which is bound by NY Laws and as such it is up to Plaintiff to prove not only that he is indeed the true PETE (Person Entitled To Enforce) of the alleged Note & Mortgage, but also that he has any legal capacity whatsoever to hold anything in contravention to the trust. In the case at Bar, Plaintiff debt collector has not the legal capacity to even be a “Holder”.
23 Black’s 9th… proffer (prof-dr), vb. (l4c) To offer or tender (something, esp. evidence) for immediate acceptance. [Cases: Criminal Law C':.:o670; Federal Civil Procedure 2013; Trial (7.::>44.]- proffer, n.
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Plaintiff debt collector offers only 3 signed documents, just 3 pieces of paper attesting to their alleged legitimacy to foreclose, their right to be PETE. Those documents are:
1. the post dated, post created and filed with the court months after foreclosure initiation, Assignment of Mortgage… which is Robo-Signed24 by a known Robo-Signer25 named Ms. Topaka Love.26
2. The post dated, post created and filed with the court months after foreclosure initiation, Affidavit of Status of Account and Military Status… again signed by the same Robo-Signer Ms. Topaka Love
3. The unattached Allonge from Option One Mort. Corp. to ______________.
Defendant submits new evidence in this case in the form of an Affidavit attesting to the Robo-signing (explained infra) of both
24 we now have a legal definition of "Robo-signer" from the U.S.C.O.A. for the 5th Circuit (TX) in the case of REINAGEL v. DEUTSCHE BANK NATIONAL TRUST COMPANY, No. 12-50569 (5th Cir. Oct. 29, 2013). The court defined "Robo-signing" as follows;
"“Robosigning” is the colloquial term the media, politicians, and consumer advocates have used to describe an array of questionable practices banks deployed to perfect their right to foreclose in the wake of the subprime mortgage crisis, practices that included having bank employees or third-party contractors: (1) execute and acknowledge transfer documents in large quantities within a short period of time, often without the purported assignor’s authorization and outside of the presence of the notary certifying the acknowledgment, and (2) swear out affidavits confirming the existence of missing pieces of loan documentation, without personal knowledge and often outside of the presence of the notary."
25 In January 2011, John L. O’Brien, Register of the Essex Southern District registry of Deeds in Salem, Massachusetts (“Register O’Brien”), commissioned McDonnell Property Analytics, Inc. (“MPA”) to conduct a forensic examination to test the integrity of his registry due to his concerns that: 1.) Mortgage Electronic Registration Systems, Inc. (MERS”) proclaims that its members can avoid recording assignments of mortgage if they register them electronically in the MERS® System; and 2.) due to the robo-signing scandal spotlighting Linda Green – an employee of Defendant DocX, LLC – as featured in a 60 Minutes expose’ on the subject which first aired on April 3, 2011.
A true and correct copy of my report entitled Forensic Examination Of Assignments Of Mortgage Recorded During 2010 In The Essex Southern District Registry Of Deeds, which I released on June 28, 2011, is available on Register O’Brien’s website at: http://salemdeeds.com/pdf/Audit.pdf.
26 John L. O’Brien, Register of the Essex Southern District registry of Deeds in Salem, Massachusetts publishes a list of known Robo-Signers at his website at http://www.salemdeeds.com/robosite/pdf/robosigners.pdf. Ms. Love’s name appears on page 2, Column B, Row 23.
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Plaintiff’s “Assignment of Mortgage” and Plaintiff’s “Affidavit of Status of Account and Military Status” marked Exhibit “__”..
THE ALLONGEOn or about June 9, 2005, as the evidence of record shows Mr.
Reed's alleged original lender, H&R Block Mortgage Corp., claims that through the use of an alleged executed endorsement which was
unattached, is incomplete, is non-authenticated by affidavit, and is left unexecuted “Pay to the Order”(as in existing distinctly separate under law from “bearer paper”) document entitled “allonge” dated June 9, 2005 from Option One to __________.27
27 Comments Of Nye Lavalle To Florida Supreme Court Page 52 Nye Lavalle, Pew Mortgage Institute, 407/968-9097 [email protected] “243. In fact, a common industry practice was to create an “unattached” and an undated “endorsed in blank” piece of paper the industry wrongly inferred was an “allonge!” 244. The unattached piece of paper with an executed endorsement upon its face would then be placed in a file with or without a note, scanned and imaged into an imaging system and then discarded, destroyed, concealed, or even later attached if necessary, upon default by a borrower when a servicer needed to create evidence of note ownership or holder status. 245. Under UCC Article 3, “indorsement” means a signature “on an instrument, not on a blank piece of paper.” 246. In order for the endorsement on an allonge to be valid, the proper document custody process that should have been followed was to: a) determine if room existed on the last page of the note or its backside to see if any room existed for the endorsement; b) only if no room existed, a blank piece of paper should be firmly affixed to the “last page” of the original wet-ink note, so as to prevent its removal and replacement; c) the first page on the face of the note should then be stamped “Allonge property address, loan number etc. should be placed upon the blank piece of paper; and then e) the endorsement stamp and signature should be placed on the affixed piece of paper to the note (i.e. an allonge). 247. An unattached to an original note blank piece of paper is not an allonge. An unattached to an original note blank piece of paper with an endorsement on its face is not an allonge either. If the endorsement is placed upon the blank piece of paper and then the endorsement and signature are placed on the blank piece of paper while unattached, all someone has endorsed was the blank piece of paper, not the original note itself. 248. Darrell W. Pierce is a Michigan lawyer for the national law firm of Dykema Gossett. Mr. Pierce served as member of the Article 9 Study Committee for the Permanent Editorial Board for the Uniform Commercial Code, as Chair of the Article 9 Filing Project and as the primary drafter of the International Association of Commercial Administrators’ Model Administrative Rules for Article 9 filing offices. He is a frequent lecturer and writer regarding UCC matters.” “249. Mr. Pierce authored an article for the Association of Corporate Counsel titled “Allonges: Separate Indorsements Not Effective Unless Affixed.” In this article, Mr. Pierce exposes the lender’s “dirty secret” of the motives and use of allonges by the mortgage industry when he writes:
“Secured lenders routinely take pledges of instruments (including negotiable instruments under UCC Article 3 and other promissory notes) as collateral. Instruments are subject to special priority rules.Security interests perfected merely by filing a UCC1 financing statement are junior to security interestsperfected by possession, without regard to time of filing or possession.Security interests perfected by “control” (possession plus indorsement) are senior to those perfected merely by filing or possession. Accordingly, secured parties who are relying on instruments as collateral will want to have control over the instruments.Instruments may be indorsed to secured parties, but it is a cumbersome process that has to be unwound when the loan is repaid as expected. It is, therefore, convenient and common practice to have the requisite indorsements supplied on a separate piece of paper. This keeps the instrument “clean” so that it can be returned clean when the secured obligations are paid. The separate piece of paper is kept with the instrument but is not typically attached to it, though the lender or its custodian has authority to do so, at least upon default.This practice works well in most cases. Even though the lender is not yet a “holder” under Article 3, because the indorsement is not attached, the lender has possession and the related loan documents should cause the lender to be a “nonholder in possession of the instrument who has the rights of a holder,” that is one who can enforce the instrument as such under UCC §3-301 , and compel indorsement under UCC §3-203.
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It is Defendant’s position that along beside the known bogus, forged and fabricated Assignment of Mortgage referenced above, the proffered “Allonge” from Option One Mort. Co. to “blank” is also a fraud and a sham created solely to represent to this Court Plaintiff’s interest in an alleged Note & Mortgage which in truth has no legal value whatsoever… except to prove Plaintiff’s and Plaintiff’s Counsel’s willingness to forge, to fabricate, to create and bring into this court fraudulent documents created solely to induce the Court’s bias at Defendant’s (and the Courts) expense.
The Wells Fargo Manual
Defendant submits new and previously unobtainable evidence in this case of Plaintiff Wells Fargo Banks recently publicly published, in
In addition, secured parties in (mere) possession have priority over other secured parties except those who have control (possession plus indorsement), so the failure to achieve full control does not normally impair priority (no one else will have possession except in rare cases). UCC §9-330(d).So, even if a separate indorsement is not initially “affixed” to an instrument, a secured party inAttached;” d) identifying information on the note such as origination date, borrower name, possession normally maintains first priority and has the power to negotiate the instrument upondefault.There are occasions, however, when having an indorsement is critically important. One would be the relatively rare case where one competing secured party has possession for itself as well as for the other competing secured party, so both would be in possession and priority could depend on the effectiveness of an indorsement. Another would be where the maker of a negotiable instrument has defenses against the named payee but the secured party, with the indorsement, would be a holder in due course. Yet another would be an assignment of a note or a casual pledge where the related documents do not clearly provide the lender with the rights of a holder.Under UCC Article 3, which applies to “negotiable instruments” (as defined in Article 3) and whichis commonly applied by courts to non-negotiable instruments, “indorsement” means a signature “on an instrument… For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument.” UCC §3-204(a) (emphasis supplied). Under this rule, a separate assignment document is not sufficient to create the requisite indorsement, unless it is “affixed” to the instrument.Some Michigan assignees found out the hard way how important it is to have one’s separate indorsement “affixed.” In one case, a separate indorsement was not attached to the note in question and the assignee was unwilling to produce the underlying assignment of loans agreement. The court held the separate indorsement was not effective and, because it referenced the unproduced underlying agreement, it did not prove an absolute assignment was intended. Brown Bark, II, LP v. Bay Are Floor Covering & Design, Inc., Case No. 296660, (Mich. Ct. App. May 31, 2011). In the other case, the assignee ultimately had two problems after it took a note and placed it in an envelope with a separate indorsement. Not only was the separate indorsement ineffective because it was not affixed to the note, it turned out the “note” was in fact a color copy of the original note, so the assignee did not even have possession of the note. Without ever having had possession, the assignee did have standing to enforce the note as a lost note under UCC §3-309. Shaya v. Karam, Case No. 308905 (Mich. Ct. App. May 6, 2014). Pledgees and other assignees of notes need to ensure that original notes are delivered to them, and if indorsements are separately provided, that transaction documents properly authorize them to attach the separate indorsements when appropriate.”
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house manual titled… “Wells Fargo Home Mortgage Foreclosure Attorney Procedure Manual, Version 1” proving scienter through a pattern and practice of Plaintiff’s and Plaintiff’s Counsel in the creation of forged and fraudulent documents created solely to allow Plaintiff and Plaintiff’s Counsel to fraudulently steal free homes from homeowners when they lacked the legal right to do so because they lacked the mandated proof to accomplish it legally.
A distinguished colleague, New York bankruptcy attorney Linda Tirelli has been working in exposing these “remediation” practices. Their “ta-da” Perry Mason-like moments of evidence all of a sudden appearing in foreclosure and bankruptcy litigation are not amusing. On March 12, 2014, the New York Post published a story on Ms. Terelli’s work wherein it wrote:
“Wells Fargo, the nation’s biggest mortgage servicer, appears to have set up detailed internal procedures to fabricate foreclosure papers on demand, according to allegations in papers filed Tuesday in a New York federal court. In a filing in New York’s Southern District in White Plains for a local homeowner in bankruptcy, attorney Linda Tirelli described a 150-page Wells Fargo Foreclosure Attorney Procedures Manual created November 9, 2011 and updated February 24, 2012. According to court papers, the Manual details “a procedure for processing [mortgage] notes without endorsements and obtaining endorsements and allonges.”
The Wells Fargo’s manual Ms. Terilli speaks of is even more disconcerting when you review just a few of the steps in its numerous processes as reflected below:
Attorney: If an allonge is still needed after a note has been endorsed, forward the allonge attachment to Wells Fargo Default Docs area via email address [email protected] and add step Y44, ATTORNEY REQUESTED ALLONGE, to FOR3
WFHM Default Docs Team: If property is located in an original doc state and attorney has the original note, review the allonge attachment to determine if we have signing authority to execute internally.
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If WFHM does have signing authority, enter log code FCALGI (ALLONGE SENT FOR INTERNAL SIGNATURE)
If WFHM does not have signing authority, enter log code FCALGE (ALLONGE SENT OUT FOR EXECUTION) and mail document for 3rd party signature.
After allonge has been executed, enter log code FCALGA (ALLONGE COMPLETED/RETURNED TO ATTORNEY).
Complete the Y44 actual date with the date allonge was returned to attorney.
The Wells Fargo manual may be reviewed and downloaded at
http://stopforeclosurefraud.com/wpcontent/uploads/2014/03/foreclosure_attorney_procedure_manual-1.pdf.
This manual, is the foundation for the strong rebuke of Wells Fargo in the recent 30- page opinion of Federal Bankruptcy Judge Robert Drain in New York’s Southern District wherein in his opinion, Judge Drain stated with emphasis:
“… [T]he blank indorsement, upon which Wells Fargo is relying, was forged,” “Nevertheless it does show a general willingness and practice on Wells Fargo’s part to create documentary evidence, after the-fact, when enforcing its claims, WHICH IS EXTRAORDINARY,”
This was on the heels of another major defeat for Wells Fargo wherein a family who had actually paid off their mortgage was unlawfully foreclosed on by Wells Fargo and the Judge awarded over $3 million in punitive and compensatory damages by Judge R. Brent Elliott of Missouri’s 43rd Judicial Circuit.
In this Missouri case, the automated robotic foreclosure, evidence and witness process was in perfect focus for this Honorable Court to understand when the corporate witness for Wells Fargo testified that:
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“I’m not here as a human being. I’m here as a representative of Wells Fargo.”
In his opinion attached as Exhibit H, Judge Elliott chastised Wells Fargo for their “outrageous and reprehensible” decisions and “deceptive and intentional conduct” that “displayed a complete and total disregard for the rights of the borrowers. He went on to state:
“Defendant Wells Fargo operated from a position of superiority provided by its enormous wealth.” “Wells Fargo’s decision took advantage of an obviously financially vulnerable family,”
the judge continued, noting that Wells Fargo showed no evidence of remorse for the harm caused. The judge wrote.
“In fact, the Court recalls the lack of remorse and humanity illustrated by a Wells Fargo corporate representative who testified, ‘I’m not here as a human being. I’m here as a representative of Wells Fargo,’ ”
The ROBO-SIGNED DOCs.
When Plaintiff, several months after initiating foreclosure, introduced into the court record a forged and fabricated, back dated and Robo-Signed document titled “Assignment of Mortgage”, Plaintiff’s Counsel certified the legitimacy of a document that could, by the very terms within the controlling document of the Trust (PSA) itself, never possibly exist.
This document is titled “Assignment of Mortgage”. Upon inspection though, this document is in reality not only the alleged assignment of the alleged mortgage but also the alleged assignment of the alleged note.
Also upon inspection it can be found that this document was attested to and signed by one Ms. Topaka Love. Ms. Love is an
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employee of Lender Processing Services in Dakota County, Minnesota and as such the AOM was also fraudulently signed by a person who had no authority to sign. It is patently fraudulent and is an obvious forgery and as explained infra it was executed two years after the Plaintiff trust’s mandated “Cut-Off date” for deposits and after foreclosure initiation.
Mortgages may be enforced only by, or on behalf of, the entity that is entitled to enforce the obligation the mortgage secures. The underlying obligation in all cases is a promissory note. The mortgage is the security instrument that secures the indebtedness created by the note to the real property.
The practice of Plaintiff Wells Fargo Bank’s use of unauthorized document forgers in Affidavit & Assignment of Mortgage creation is now common knowledge. It is a matter that has even been unaffectionately termed “Robo-Signing”28 29AND now through common knowledge of Plaintiff Wells Fargo Bank’s Public admissions (and payment of $ Billions in fines concerning same) of participation in that very same illegal action on a daily, monthly and yearly basis, Defendant submits and requests the Courts Judicial Notice of the recently and previously unavailable Affidavit and accompanying letter attached hereto as Exhibit “F” stating in part;
“In an attempt to provide you with more assistance, I have enclosed, an affidavit signed
by me, as Register of the Southern Essex District Registry of Deeds, attesting to the
28 The term "robosigning" does not accurately describe the pattern and practice. The pattern and practice are more accurately described as contract perjury, contract forgery, evidence fabrication, fraud upon the Court, and theft in which families are rendered homeless as a result of criminal behavior.
29 The practice from investopedia, "In the third and fourth quarters of 2010, a robo-signing scandal emerged in the United States involving GMAC Mortgage and a number of major U.S banks. Banks had to halt thousands of foreclosures in numerous states when it became known that the paperwork was illegitimate because the signers had not actually reviewed it. While some robo-signers were middle managers, others were temporary workers with virtually no understanding of the work they were doing."
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presence of a robo-signed signature on your document as listed on McDonnell Property
Ana1ytics Approved Robo-signers List. If you are currently being foreclosed upon, this
affidavit may be presented to your attorney, the lender, or the court to show that your
chain of title has been corrupted.”
The above referenced Affidavit attests to the unlawful and “known Robo-Signer” signature status of Plaintiff’s Assignment of Mortgage (Ex “E”) as well as signature status of Plaintiff’s sole proffered and alleged legal conclusory Affidavit titled “STATUS OF ACCOUNT AND MILITARY STATUS AFFIDAVIT” (Ex. “__”) which are both signed by one Ms. Topaka Love, as was previously articulated to this Court by Defendant in all of Defendant’s previous pleadings. The above mentioned forged, fraudulent and conclusory “Affidavit” and “Assignment of Mortgage’ are 2 of the three solely signed documents Plaintiff presented to the court in their case to establish their alleged ownership of the alleged Note & Mortgage and their subsequent right to initiate this foreclosure suit against Defendant.
The above Love conclusory affidavit represents that it is based on Love’s familiarity with Defendants account stating “Affiant has access of and has personal knowledge of the accounts of said company, and specifically with the account of John L. Reed, defendant herein.” Love also avers that “said account is in default and that plaintiff has elected to call the entire balance of said account due and payable..”. While the Love Affidavit states that Love’s personal knowledge is limited to her review of Option One Mortgage Co. as Servicing Agent for Plaintiff, Love fails to identify, describe or annex the particular business records upon which her limited knowledge is based.
Significantly, the Love Moving Affidavit makes the conclusory representation that plaintiff has been in continuous possession of the note and mortgage since prior to the commencement of this action
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without providing any factual details, or the source of Love’s knowledge. In addition to a lack of foundation, the Love Moving Affidavit fails to provide evidence that the originating lender, H&R Block Inc., indorsed and physically delivered the alleged Reed Note, through the proper and mandated legal processes necessary to effectuate a true transference of ownership and all rights and interests thereof to each participant in the securitization chain and then finally to the Asset Backed Receivables Trust.
Defendant has repeatedly denied plaintiff’s actions on the ground that Plaintiff Wells Fargo Bank as Trustee for trust lacks standing to foreclose.
Specifically, Defendant contends and has always contended in each and every of his pleadings that Ms. Love also lacked the actual authority to execute the Option One Assignment.
The above referenced affidavit of John Obrien, combined with the several other factual inconsistencies the Defendant has previously articulated to this Court30 31 32 33, prove beyond any doubt that Plaintiff’s position, a position which is completely void of legal standing to have initiated this foreclosure action against Defendant, could not have been accomplished without the use of, as was previously articulated by Defendant,34 forged and fraudulently created
30 Answer of Defendant John Reed (5/26/2008) § 8, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, and throughout the rest of the pleadings.31
? Answer of Defendant John A. Reed Memorandum in Opposition to Plaintiff’s Motion For Summary Judgment and Request For Trial By Jury (filed Aug, 15th, 2008) § The opening statement “ Firstly, You Honor, the plaintiff hasn’t even proven that it owned or held the promissory note which is the subject of the complaint…” § 1, 2, 32
? Each and every other pleading submitted by Defendant and already a part of this legal action’s record.33 MOTION TO APPEAL THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANTS EMERGENCY AMENDED MOTION TO VACATE A VOID JUDGMENT in it’s entirety34
? MOTION TO APPEAL THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANTS EMERGENCY AMENDED MOTION TO VACATE A VOID JUDGMENT at 4 thru 16, 35, 45, 46, 47,48, 50, 52, 58, 60, 67, 239, 240, 241, 242, .
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documents, created specifically by and delivered into this Court while being Certified by Plaintiff’s Counsel as being true, just and accurate for the sole purpose of blinding this Court to the legal realities of their position and the situation which then lead to the ultimate theft of Defendants home, loss of Defendant’s personal and business inventory and possessions, forced homelessness upon Defendant and became the cause of Defendant’s mental injury while allowing Plaintiff’s own unjust enrichment. In essence, they not only got a free house, they also got the Court to launder their dirty money.
Defendants pleadings and exhibits show undeniable proof that each of the entities involved in their entirety and throughout the entire chronology (time-line) of this alleged mortgage did fail in their legal and mandatory due diligence duties and requirements to sign, date, authenticate, record and more ( stated in more specificity infra). The true holder in due course of the alleged Note & Mortgage and true holder of the legal right to foreclose upon this alleged Note & Mortgage is entirely a falsity and under no circumstance of fact is it, was it, nor can it ever be the Plaintiff Wells Fargo Bank NA. as Trustee for this Trust who would have the legal authority or right to bring a foreclosure action against Defendant Reed..
As a result, the Courts November 13th, 2008 entry granting Plaintiff’s motion for judgment and issuing a decree of foreclosure is void ab initio (as opposed to voidable).
Accordingly, based upon the foregoing, Defendant respectfully requests that the November 13th 2008 entry be vacated and this matter remanded back to the Civil Court with instruction to dismiss, instruction to quiet title and each of Defendants Counterclaims to be lawfully adjudged.
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Respectfully submitted,
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John A. Reed
40 Maple Ave.Centerville, Ohio [email protected]
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